This opinion is subject to
further editing.If published, the
official version will appear in the bound volume of the Official
Reports.

A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals.SeeWis. Stat. § 808.10 and Rule 809.62.

Appeal No.

2013AP40

Cir. Ct. No.2012CV69

STATE OF WISCONSIN

IN COURT OF
APPEALS

DISTRICT III

Gail Collett and Marion Collett,

Plaintiffs-Respondents,

v.

R. Jay Richardson, Kristi A. Richardson and Son-Bow
Farms,

Inc.,

Defendants-Appellants,

Robert J. Richardson,

Defendant.

APPEAL
from a judgment of the circuit court for Pierce County:JOHN
A. DAMON, Judge.Affirmed in
part; reversed in part and cause remanded with directions.

Before Hoover, P.J., Mangerson and Stark, JJ.

¶1PER CURIAM. R. Jay Richardson, Kristi
Richardson and Son-Bow Farms, Inc., (collectively, the Richardsons) appeal a
summary judgment granted in favor of Gail and Marion Collett.The Richardsons argue the circuit court erred
by concluding that an option to purchase granted to them by the Colletts was
invalid for lack of consideration.They
also argue the Colletts’ lawsuit to declare the option invalid is barred by the
six-year statute of limitations for contract actions and by the equitable
doctrine of laches.

¶2We agree with the Richardsons that sufficient consideration
supported the option to purchase.We
therefore reverse in part.However, we
remand for the circuit court to consider the Colletts’ alternative arguments regarding
the option’s enforceability. In
addition, we affirm the circuit court’s conclusion that the Colletts’ suit is
not time barred.

BACKGROUND

¶3The following facts are undisputed.The Colletts were the sole shareholders of
Collett Farms, Inc., which owned and operated a 160-acre dairy farm in Pierce
County.The Collets also personally owned
approximately 119 acres of farmland across the road from the corporation’s farm.

¶4In the spring of 1993, the Colletts consulted their attorney
and tax preparer, Robert Richardson, about the tax ramifications of a possible
sale of their farm.At the time, attorney
Richardson’s son, R. Jay Richardson, was working for his father as an
accountant and tax preparer.Attorney
Richardson asked Jay to examine the Colletts’ tax files to determine the
Colletts’ cost basis and calculate the potential tax if they sold the farm.Jay calculated the potential tax under three
scenarios.

¶6The parties signed the purchase agreement on February 12,
1994.For tax purposes, the transaction
was structured as a purchase of Collett Farms stock, rather than a direct
purchase of the 160-acre farm. The
agreement provided that the Colletts would transfer ten shares of stock to the
Richardsons in exchange for $1,000.Collett
Farms would then redeem additional shares from the Colletts for $114,000, which
was payable to the Colletts in monthly installments.Collett Farms’ payment obligation to the
Colletts was “collateralized by a first mortgage lien” on the 160-acre parcel.The agreement also required Collett Farms to sell
all farm personal property at auction and “use the proceeds therefrom for the
redemption of [Collett Farms] stock[.]”The
agreement stated the parties anticipated the sale to generate net proceeds of
about $50,000.In addition, Collett
Farms was required to pay the Colletts the cash balance of the corporate
accounts, along with any patronage dividends.Collett Farms would also “remain liable” for payments to two former
shareholders under outstanding redemption agreements.

¶7The purchase agreement did not transfer ownership of the Colletts’
personally-owned 119-acre parcel to the Richardsons.However, the following language in paragraph G.
of the agreement purported to grant the Richardsons an option to purchase the
119-acre parcel:

The parties further mutually agree that as additional
consideration for this agreement Sellers will grant to Purchaser and/or
Corporation an option to purchase property described as follows:

[Legal description of the 119-acre parcel.]

for the sum of Est.
FMV on R/E Tax Statements upon the following terms and conditions:

The option may not be exercised prior to _____________.

The purchase price shall be payable ____% down and
the balance thereof in monthly installments based upon a ___ year amortization
with interest on the outstanding balance at the rate of ___%.[[2]]

Immediately after the option
clause, the agreement further provided:

I.[[3]] Prior
to the election/termination of said Option Agreement, Sellers agree to lease
said premises to Corporation for a sum equal to $55.00 per tillable acre/crop
year.The parties agree that said
premises contain 87.1 tillable acres.

J. Purchaser herewith tenders to Seller the
sum of $1,000.00 as consideration to bind this agreement with the mutual
understanding that said sum shall be applied toward the purchase of stock
referenced in Paragraph B.

¶8The parties’ relationship remained amicable through
2011.The Richardsons hired Gail Collett
to work part time on the farm, and they agreed to rent increases for the
119-acre parcel on several occasions.However,
in late 2011, the Colletts contacted the Richardsons and asked them to acknowledge
that the option was invalid.The
Richardsons refused, and, in February 2012, they notified the Colletts they
intended to exercise the option.The
Colletts responded on March 5, 2012, by filing a lawsuit against the
Richardsons seeking to have the option declared invalid.The Colletts’ lawsuit also asserted a
malpractice claim against attorney Richardson.The Richardsons counterclaimed for specific performance of the option,
or, alternatively, for damages.

¶9The Colletts and the Richardsons filed cross-motions for
summary judgment.The Colletts argued
the option was unenforceable because:(1) there was no independent consideration for the option; (2) the
option clause was merely a promise to grant an option, not an enforceable
option to purchase; and (3) the option clause did not set forth a specific time
period for exercising the option.The
Richardsons argued the option was valid, and they also asserted the Colletts’ declaratory
judgment claim was barred by the six-year statute of limitations for contract
actions and by the doctrine of laches.

¶10The circuit court granted summary judgment in favor of the
Colletts.The court reasoned that, under
McLellan
v. Charly, 2008 WI App 126, 313 Wis. 2d 623, 758 N.W.2d 94, an
option to purchase requires consideration that is completely separate and
independent from consideration furnished for any other contract terms.The court found that, here, “[a]ll the
consideration paid in the purchase contract went to buy the stock in the
corporation.”In other words, the
Richardsons furnished consideration only for their purchase of the 160-acre
farm, and they did not provide any independent consideration for the option to
purchase the 119-acre parcel.The court therefore
concluded the option was invalid for lack of independent consideration.As a result, the court did not address the Colletts’
alternative arguments that the option was unenforceable.

¶11The court also determined the Colletts’ declaratory judgment claim
was not barred by the statute of limitations or laches.Consequently, the court entered a judgment
declaring the option to purchase “unenforceable and void.”In addition, the court dismissed the
Colletts’ malpractice claim against attorney Richardson, reasoning that,
without a valid option, the Colletts could not prove any damages stemming from attorney
Richardson’s conduct.The Richardsons now
appeal.[4]

DISCUSSION

¶12We review summary judgment decisions independently, using the
same methodology as the circuit court.Hardy
v. Hoefferle, 2007 WI App 264, ¶6, 306 Wis. 2d 513, 743 N.W.2d
843. Summary judgment is appropriate
where there is no genuine issue of material fact and the moving party is
entitled to a judgment as a matter of law. Wis.
Stat. § 802.08(2).[5]The Richardsons contend the circuit court
erred by granting the Colletts summary judgment because:(1) the option to purchase was supported by
consideration, and is therefore valid; (2) the Colletts’ claim is barred by the
six-year statute of limitations for contract actions; and (3) the
Colletts’ claim is barred by laches.The
Colletts dispute these assertions, and they also contend the option is unenforceable
for two alternative reasons.We first
address whether the option is enforceable.We then turn to the Richardsons’ arguments that the Colletts’ declaratory
judgment claim is time barred.

I. Consideration for the option

¶13Every contract requires an offer, acceptance, and
consideration.Piaskoski & Assocs. v.
Ricciardi, 2004 WI App 152, ¶7, 275 Wis. 2d 650, 686 N.W.2d 675.“Consideration may be either a benefit to the
promisor or a detriment to the promisee[,]” but in either case, the benefit or
detriment must be bargained for. McLellan,
313 Wis. 2d 623, ¶27.“A consideration
of even an indeterminate value, incapable of being reduced to a fixed sum, can
be sufficient to constitute legal consideration.”Id. (quoting St. Norbert Coll. Found., Inc. v.
McCormick, 81 Wis. 2d 423, 430-31, 260 N.W.2d 776 (1978)).We are concerned with the existence, not the
adequacy, of consideration.Id.

¶14Whether the circuit court applied the correct legal standard to
determine the existence of consideration, and whether the facts constitute
consideration under the correct standard, are questions of law that we review
independently.Id., ¶28.Based on the undisputed facts, the circuit
court determined the option to purchase the Colletts’ 119-acre parcel was invalid
because it was not supported by any consideration separate from the consideration
furnished for the sale of the 160-acre farm.The court relied on McLellan for the proposition that an
option to purchase requires consideration that is completely separate and
independent from any consideration provided for other terms of the contract
containing the option. McLellan,
however, does not stand for that proposition.

¶15In McLellan, the seller granted the buyer an option to purchase a
parcel of property for $675,000 within 180 days.Id., ¶8.The option agreement contained detailed
provisions describing the terms of the potential sale.Specifically, the agreement contained a
provision requiring the buyer to lease the property back to the seller after
closing and a provision requiring the seller to repurchase the property for a
discounted price at the buyer’s election during the two-year period following
the sale.Id., ¶¶8, 33 n.7.After the parties signed the option agreement,
another party expressed an interest in purchasing the property for $1
million.Id., ¶¶9, 11.The buyer then attempted to exercise his
option to purchase the property, but the seller refused to honor the option,
asserting it was unenforceable for lack of consideration.Id., ¶¶11-12.The circuit court found that the leaseback
and repurchase provisions in the agreement were sufficient consideration for
the option.Id., ¶13.It reasoned the seller had “asked for the
leaseback provision so that he could continue to use the property for storage”
and had “negotiated a reduction in the price in the repurchase provision [the
buyer] requested[.]”Id.Thus, the court found that both provisions benefitted
the seller.

¶16On appeal, this court reversed.We concluded that, for an option to constitute a binding contract,
“there must be some consideration for the option that is separate from the consideration for the sale of the property.”Id., ¶24 (emphasis added).We explained the reasoning underlying this
rule is that

an option contract and a contract of sale are two
separate contracts:the former is a
contract that vests the optionee with the unilateral right to accept the
continuing offer during a stated period of time, while the sale contract comes
into being only if and when the optionee exercises the option.

Id.,
¶25.We observed that the leaseback and
repurchase provisions in the parties’ agreement would apply only if the buyer
ultimately exercised the option.Id.,
¶33.Thus, any benefit those provisions
provided to the seller was completely contingent on the sale taking place—if
the sale did not occur, the seller would be left with no benefit
whatsoever.Id.We therefore concluded the leaseback and
repurchase provisions were “consideration for the [future] sale contract, but
not separate consideration for the option contract.”Id.

¶17McLellan stands for the proposition that a valid option to
purchase requires consideration separate from the consideration that will ultimately
be exchanged if the option is exercised and a sale of the subject property
takes place.McLellan does not,
however, hold that an option to purchase requires consideration completely
independent from the consideration provided for other terms of the contract
containing the option.Neither the circuit
court nor the Colletts have cited any Wisconsin case that stands for that
proposition.

¶18Moreover, as the Richardsons point out, according to the Restatement (Second) of Contracts
§ 80(1) (1981), when a contract contains multiple promises, there is
consideration for each promise “if what is bargained for and given in exchange
would have been consideration for each promise in the set if exchanged for that
promise alone.”Stated differently, “two
or more promises may be binding even though made for the price of one.A single performance or return promise may
thus furnish consideration for any number of promises.”Restatement,
supra, § 80 cmt. a.

¶19Here, the option to purchase was part of a purchase agreement
that contained multiple promises.The Colletts
gave the Richardsons stock in Collett Farms—and, as a result, ownership of the
160-acre parcel—in exchange for $1,000 and an agreement that Collett Farms would
redeem the Colletts’ remaining stock.As
collateral, the Colletts received a first mortgage lien on the 160-acre parcel.As the new owners of Collett Farms, the
Richardsons were required to:(1) hold a
personal property auction; (2) apply the auction proceeds to the stock
redemption agreement; (3) pay the Colletts patronage dividends and the cash
balance of corporate accounts; and (4) make payments under two outstanding
redemption agreements.“[A]s additional
consideration for this agreement,” the purchase agreement also purported to
grant the Richardsons an option to purchase the Colletts’ 119-acre parcel. The agreement further stated that, until the
option was exercised or terminated, the Colletts would lease the 119-acre
parcel to the Richardsons in exchange for rental payments.Finally, the agreement required the Richardsons
to pay the Colletts $1,000 “as consideration to bind this agreement[,]” and the
parties agreed that sum would be applied to the Richardsons’ purchase of
Collett Farms stock.

¶20Under these circumstances, we decline to hold that the option
to purchase was invalid for lack of consideration.The option was part of a contract that
encompassed multiple exchanges.Real
estate, stock, and money were transferred, debt obligations were assumed, and a
rental agreement was entered into.Unlike in McLellan, these benefits and detriments were contemporaneous
with the granting of the option.They
were not contingent on a future sale of the 119-acre parcel.

¶21Further, the purchase agreement specifically required the
Richardsons to pay the Colletts a $1,000 down payment “as consideration to bind
this agreement[.]”The Colletts argue,
without citation to authority, that because the $1,000 payment was ultimately
applied to the purchase of Collett Farms stock it cannot also serve as consideration
for the option.The Colletts’ argument ignores
the contract’s plain language, which unambiguously states that the $1,000
payment was made to bind the entire agreement, not just the purchase of Collett
Farms stock.

¶22In addition, the option to purchase was tied to the purchase
agreement’s lease provision.Immediately
after the option clause, the purchase agreement stated the Colletts would lease
the 119-acre parcel to the Richardsons “[p]rior to the election/termination of
said Option Agreement[.]”Thus, the lease
provision was explicitly connected to the option to purchase.In Bozzacchi v. O’Malley, 211 Wis. 2d
622, 627, 566 N.W.2d 494 (Ct. App. 1997), which involved a lease agreement containing
an option to purchase, we concluded the tenant’s rental payments were “a
significant part of the consideration for the option.”Applying that reasoning here, the
Richardsons’ rental payments to the Colletts were also consideration for the
option to purchase the 119-acre parcel.The
circuit court therefore erred by concluding the option was invalid for lack of
consideration.

II. Alternative arguments about
the option’s enforceability

¶23The Colletts next argue that, even if sufficient consideration
supports the option to purchase, it is nevertheless unenforceable for two
reasons.First, the Colletts argue the
purchase agreement contains a mere promise to provide an option at some point
in the future, rather than an enforceable option to purchase.Second, the Colletts contend that, because
the purchase agreement does not specify a time period for exercising the
option, the Richardsons were required to exercise the option within a
reasonable time.SeeFleischman v. Zimmermann, 258 Wis. 194, 197, 45 N.W.2d 616
(1951) (“[W]here no time is fixed in the option for its acceptance the law will
imply that a reasonable time is intended.”).The Colletts argue the Richardsons’ eighteen-year delay in exercising
the option was not reasonable, and the option is therefore void.

¶24The Colletts raised these arguments in the circuit court, but
the court did not address them because it concluded the option was invalid on
other grounds.It would be inappropriate
for this court to address the Colletts’ alternative arguments in the first
instance.While the Colletts’ argument
that the option clause is a mere promise to provide an option presents a pure
question of law, their appellate briefs do not develop the argument
sufficiently for us to make an informed ruling.We therefore conclude it would be more appropriate for the circuit court
to address this argument on remand, preferably with the aid of more extensive
briefing.If the circuit court
determines the option is enforeceable, it must then determine whether the
Richardsons exercised the option within a reasonable time.The circuit court is obviously in a better
position than this court to make the factual determinations necessary to
resolve the Colletts’ reasonable time argument.See Minguey v. Brookens, 100 Wis. 2d 681, 689, 303 N.W.2d 581
(1981); see alsoWurtz v. Fleischman, 97
Wis. 2d 100, 107 n.3, 293 N.W.2d 155 (1980) (court of appeals may not find
facts).

¶25We therefore remand for the circuit court to consider, first,
whether the option clause constitutes a mere promise to provide an option,
rather than a binding offer to purchase.If the court concludes the option clause is binding, it must then determine
whether the Richardsons exercised the option within a reasonable time.

III. Statute of limitations

¶26We next address the Richardsons’ argument that the Colletts’
declaratory judgment claim is barred by Wis.
Stat. § 893.43, the statute of limitations for contract
actions.Subject to an exception not
relevant here, § 893.43 states that “[a]n action upon any contract,
obligation or liability, express or implied … shall be commenced within 6 years
after the cause of action accrues or be barred.”The Richardsons contend the Colletts’ cause
of action to declare the option unenforceable accrued on February 12, 1994, the
date the purchase agreement was signed.They
therefore argue the Colletts were required to file their claim by February 12,
2000.

¶27We disagree.Our supreme
court has held that, under Wis. Stat. § 893.43,
“a contract cause of action accrues at the moment the contract is breached.” CLL Assocs. Ltd. P’ship v. Arrowhead Pac.
Corp., 174 Wis. 2d 604, 607, 497 N.W.2d 115 (1993).The Colletts’ complaint does not allege that the
Richardsons breached any term of the purchase agreement.Instead, it asks the court to declare whether
one of the agreement’s terms is enforceable.Because the Colletts’ claim is not premised on a breach of the purchase
agreement, no claim has accrued for purposes of § 893.43.Consequently, § 893.43 does not bar the
Colletts’ claim.

IV. Laches

¶28Alternatively, the Richardsons argue the Colletts’ declaratory
judgment claim is barred by the doctrine of laches.[6]“Laches is an equitable doctrine whereby a
party that delays making a claim may lose its right to assert that claim.”Zizzo v. Lakeside Steel & Mfg. Co.,
2008 WI App 69, ¶7, 312 Wis. 2d 463, 752 N.W.2d 889.Laches is distinct from a statute of
limitations, and it may be found even if the applicable statute of limitations
has not yet run.Id.The three elements of laches are:(1) unreasonable delay by the party seeking
relief; (2) lack of knowledge or acquiescence by the party asserting laches
that a claim for relief was forthcoming; and (3) prejudice to the party
asserting laches caused by the delay.Id.

¶29The Richardsons cannot establish that the Colletts unreasonably
delayed filing their declaratory judgment action.Under the purchase agreement, it was the
Richardsons, not the Colletts, who were empowered to exercise the option.The Richardsons waited eighteen years to
exercise the option, and they did so only after the Colletts asked them to
acknowledge the option was invalid.Until
the Richardsons attempted to exercise the option, the Colletts had no reason to
seek a judgment declaring the option unenforceable.In our opinion, the real issue is not whether
the Colletts unreasonably delayed filing their declaratory judgment claim, but
whether the Richardsons unreasonably delayed exercising the option.As discussed above, the circuit court may
have to make that determination on remand, if it concludes the option to
purchase is otherwise enforceable.See supra, ¶¶23-25.

¶30No Wis. Stat. Rule
809.25(1) costs to either party.

By the Court.—Judgment affirmed in part; reversed in part and cause
remanded with directions.

This opinion will not be
published.SeeWis. Stat. Rule
809.23(1)(b)5.

[1] There
is apparently some dispute about attorney Richardson’s role in the transaction,
and whether he was acting as the Colletts’ attorney when he drafted the
purchase agreement.The Richardsons
assert attorney Richardson told the Colletts they “needed to seek independent
professional advice regarding the … draft Purchase Agreement” and he “made
clear to both parties that once Jay approached Gail about the purchase, [attorney
Richardson’s] only role was as scrivener of the draft agreement.”Any disputes over attorney Richardson’s
involvement in the transaction are not material to our resolution of this
appeal.SeeMaroney v. Allstate Ins. Co., 12 Wis. 2d 197, 202, 107
N.W.2d 261 (1961) (Disputed facts that are “immaterial to the questions of law
presented ... do not afford a basis for denying summary judgment.”).

[2] The
italicized language indicates a handwritten term that was added to a blank in
the typewritten purchase agreement.The
striking was also added by hand.

The Colletts assert the handwritten changes to
paragraph G. were not present when they signed the purchase agreement.They also assert that they never intended to
give the Richardsons an option to purchase the 119-acre parcel, they never
discussed granting the Richardsons an option to purchase before signing the
purchase agreement, and they were not aware until 2011 that the agreement
purported to grant the Richardsons an option to purchase.The Richardsons dispute these assertions.However, any factual disputes about the
Colletts’ knowledge of or intent to grant an option are not material to our
resolution of this appeal.SeeMaroney, 12 Wis. 2d at 202.

[4] The
Colletts have filed a separate appeal challenging the dismissal of their claim
against attorney Richardson “to preserve their claim against him in the event
the option is found to be valid.”Briefing in that appeal has been stayed pending resolution of the
Richardsons’ appeal.

[5] All
references to the Wisconsin Statutes are to the 2011-12 version unless
otherwise noted.

[6] The
section of the Richardsons’ appellate brief addressing laches is entitled
“Laches and Equitable Estoppel.”However,
aside from asserting that the Richardsons “relied on those terms that gave them
the right to rent the land and ultimately the right to purchase it for fair
market value[,]” the Richardsons do not develop an argument that the Colletts
are equitably estopped from seeking to declare the option invalid.They do not list the elements of equitable
estoppel, nor do they explain how those elements are satisfied in this case.We need not address undeveloped
arguments.SeeState v. Pettit, 171 Wis. 2d 627, 646, 492 N.W.2d 633 (Ct.
App. 1992).